Importance Score: 65 / 100 🔴
US Firms Sound Alarm on Tariff Impact and Economic Uncertainty
Top executives at prominent US corporations are expressing concerns about the repercussions of tariffs on their bottom lines and the broader economy. Several major players in technology, footwear and consumer goods are adjusting their outlook. Specifically, Intel, Skechers, and Procter & Gamble have either reduced their profit projections or, wary of current economic instability, opted to withdraw them altogether.
The United States President has been leveraging substantial tariffs to encourage key trade partners to negotiate, aiming to reshape international trade relationships.
While no new trade agreements have been finalized between the US and other nations, there are promising signals emerging from discussions with South Korea.
Intel Flags Economic Slowdown
“The highly dynamic trade policies in the US and beyond, together with regulatory risks, have elevated the likelihood of an economic downturn, increasing the probability of a recession,” stated Intel’s chief financial officer, David Zinsner in a conference call with investors.
“We anticipate cost escalations for sure,” he added, as the California-based corporation revealed disappointing profit and revenue estimates.
Following these announcements, Intel’s stock value plummeted by over 5% in after-hours trading.
Skechers Cites a “Dynamic Environment”
Outside the technology sector, footwear producer Skechers also generated unease among investors. Shares in the firm declined after it retracted its annual results forecast.
“The existing circumstances are simply too unpredictable to plan results with a reasonable guarantee of success,” Skechers’ chief operating officer, David Weinberg, informed investors during a post-earnings call.
Skechers, like its counterparts Nike, Adidas, and Puma, relies on factories situated in Asia, especially China, to manufacture its merchandise.
Procter & Gamble Considers Price Adjustments
Remarks from Procter & Gamble (P&G) executives hinted at the possibility of tariffs leading to increased costs for consumers.
The company, which manufactures brands such as Ariel, Head & Shoulders, and Gillette, stated that it was evaluating modifications to its pricing strategies to offset the additional expenses incurred from materials sourced from China and other regions. Additionally, it anticipated sales growth this year to be lower than previously projected.
“We will pursue every avenue to mitigate the impact,” said Andre Schulten, P&G’s financial chief, noting that adjustments to “some level of consumer pricing” would be necessary.
These companies add to the growing chorus of global firms expressing concerns about the implications of the Trump administration’s trade policies.
US and South Korea Trade Talks Show Promise
In other news, discussions between US and South Korean trade representatives in Washington DC, aiming to resolve tariff issues, appear to have yielded positive results.
“Very Successful” Meeting
US Treasury Secretary Scott Bessent characterized the meeting between the two sides as “very successful”.
“We may be progressing more swiftly than initially anticipated, and we will engage in technical discussions as early as next week,” he informed reporters following the meeting.
Toward a “July Package”
South Korea’s industry minister, Ahn Duk-geun, who also participated in the discussions, echoed Bessent’s optimism and indicated that they are striving for a “July package”.
The 90-day moratorium on increased tariffs affecting numerous countries is scheduled to expire on July 8.
President Trump has stated that over 70 countries have expressed interest in initiating negotiations since the tariffs were announced.